Once the tax department processes the income tax return (ITR), it sends an intimation notice to the taxpayer under section 143(1) of the Income Tax Act. This notice informs taxpayers whether the income tax calculation in the ITR filed by them matches that of the tax department as per the records they have.
This notice, or say intimation, is the preliminary assessment and is referred to as summary assessment without calling the taxpayer. At this stage, no detailed scrutiny is carried out.
So, this effectively means that the return has been processed, said Sandeep Sehgal, Director- Tax and Regulatory at AKM Global while speaking to CNBC-TV18.
“It involves a prima facie verification and fixing the errors by the tax department in relation to tax calculation and tax payments to ascertain if any tax or interest is due or refund is due to the taxpayer,” he said.
Broadly, there are three types of intimation that the tax department sends (compiled by Kapil Rana, Founder & Chairman, HostBooks Ltd):
• Intimation with no demand or refund:
This type of intimation is sent if the department has accepted the return without making any adjustment.
• Intimation with demand: This type of intimation is issued after making adjustments.
• Intimation with a refund: This type of intimation is issued if excess income tax has been paid by the assessee either in the form of TDS, TCS, advance tax, self-assessment tax as compared to the tax determined in return of income.
So, what is the time limit for the issuance of this notice?
This notice is sent to the assessee within nine months from the end of the financial year in which the return is filed. If no intimation has been received by the assessee within such time period, then it shall be presumed that there are no adjustments carried out in the return filed by the taxpayer and no change in tax liability/refund, said Rana while talking to CNBC-TV18.
What should taxpayers do after receipt of this notice?
Once received, a taxpayer should check for issues highlighted in the intimation, if any, and submit a response for the discrepancy in the figures reported by the taxpayer vis-à-vis calculated by the income-tax department, said Sehgal of AKM Global.
“The response can be filed through the income-tax e-filing account by visiting e-proceedings tab or submitting a revised ITR. If there is no discrepancy, no action is to required on the part of the taxpayer,” he said.
On not agreeing with the intimation i.e. adjustments made, Rana of HostBooks said that taxpayers can file rectification u/s 154(1).
"In case taxpayers are not satisfied with the processing of rectification then they can also file online grievance or contact their jurisdictional assessing officer," he added.
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(Edited by : Abhishek Jha)